With online shopping experiences at the height of popularity, consumer preferences have shifted to accommodate brands beyond brick and mortar locations. Plenty of companies thrive in the direct to consumer space – particularly in the fashion and beauty industries – but food and beverage companies haven’t seen much success overall, with less than 1% of food being sold directly to consumers as of late 2019. Bringing products online presents a unique set of challenges; mostly ensuring product quality through the process of packaging, shipping and delivery to households. This and other factors have inhibited the possibility of DTC sales for many food and beverage companies. However, the COVID-19 pandemic has opened up opportunities for more brands to experiment with this model.
As consumers seek out alternative ways to shop for groceries, online sales are driving a greater demand for DTC items.
- Virtual grocer Thrive Market has seen a notable increase in sales from members shopping for natural and organic food staples.
- Hungryroot, the hybrid grocery delivery/meal kit service, has proven itself an attractive option for healthy food delivery during shelter in place measures.
- As the prospect of meat shortages in the US looms, Beyond Meat is taking the opportunity to ramp up its DTC offerings and accommodate the growing demand for meat alternatives.
- Even PepsiCo is shifting to accommodate DTC demand with the launch of PantryShop.com and Snacks.com – online retailers where consumers can purchase pantry kits and snacks from popular brands.
Marketing is going DTC too, in the wake of cancelled trade shows that fledgling brands have always relied on to establish themselves.
New business development has been relegated to entirely online avenues, with virtual pitches and digital trade shows substituting for in-person networking. It’s also becoming clear that companies need to speak directly to consumers, which is done mainly via social media. It’s an interesting shift to building a connection with the consumer first, instead of retailers and other industry insiders.
Farm to table is more attractive (and necessary) than ever.
Farms are the current heroes of the food world. More consumers are turning straight to the source for fresh food in order to avoid overcrowded and understocked grocery stores. In turn, the farms that experienced a fall in sales due the pandemic are recouping some revenue by operating as DTC companies.
The San Francisco fishery Water2Table supplied restaurants with fresh seafood, but their business dried up when dine-in establishments shuttered for shelter in place measures. The company now stays afloat by offering online menu ordering for seafood aficionados at home. While it’s a sharp pivot from the way the company once operated, it’s allowed staff to remain employed and San Francisco residents to support a local food source.
It’s a challenge for some farms to transition to a DTC model, however. Though the demand for CSA’s and other food delivery options has skyrocketed, staffing in the food production industry has taken a hit due to Covid 19. But as the food chain continues to be strained, consumer attitudes will continue to shift toward viewing local food as a long term option.
The societal response to the COVID-19 pandemic has changed our relationship with food dramatically. As much as we are turning to local and fresh ingredients, we rely equally on the convenience of pre-prepared food available for delivery. Online shopping for food is at an all time high, and so companies are presented with an opportunity to connect with their consumers directly. From locally farmed goods to big name snacks like Frito-Lay, the direct to consumer model is more prevalent than ever – and it seems like it’ll stick around, even in the post-pandemic world.